Distributed power reduces operating costs. Even though much of the discussion about solar energy focuses on the difference between energy from fossil fuels versus renewable energy - the key distinction for Hawaii’s businesses is between distributed and centralized power generation.  (Distributed power is produced where it is consumed, whereas centralized power is produced in one location and transported to another for consumption).  The difference is important because renewable energy can be made at a central location (such as a wind farm) and sold at wholesale prices to the utility, which resells it to consumers at the full retail rate.  This has no impact on operating costs faced by Hawaii businesses, even if the cost to produce power from centralized renewable sources like wind or geothermal is lower than that of centralized fossil fuel plants.

Distributed solar power, lowers your operating costs and puts you in control of your power costs over the twenty-five year life of the system. By investing in a solar system that makes power where you use it, you are buying a hedge against future energy prices, regardless of the feedstock for grid power.

The table below clarifies the effect that using distributed and centralized power has on your firm’s operating costs. It uses a typical 100 kW system (enough to offset about a $3,000/month power bill on Oahu) and base rates of 25 cents/kWh and 35 cents/kWh to trace out the reduction in operating costs a business owner would reap under different rates of energy price growth over the next 25 years. (Actual prices rose 5.9 percent on a compound annual basis from 1991 to 2007 but jumped 15 to 25 percent in the last six months, depending on which island the user is located.) Conservatively assuming that price growth will stay between 5 and 10 percent annually, Oahu business would save between $1.0 and $2.9 million on Oahu over the next 25 years from a $750,000 investment in solar.  On Maui and the Big Island, the same system reduces operating costs between $1.7 and $4.4 million.  If power prices rise more rapidly, the savings are higher still.